New Japanese PC Godzilla? Fujitsu, Toshiba, Vaio 'in talks'

Vaio has narrowed its product line to focus on premium business users with products such as the Vaio Z.

Image: Vaio

Talks underway in Japan right now could see the emergence of a new PC giant. Vaio Corp, the PC maker spun out by Sony in 2014, is close to locking in a three-way merger with the PC divisions of Toshiba and Fujitsu, Bloomberg reports.

The company expects to close the deal by the end of March, which would create a PC brand that's big enough to contend for the domestic market's top spot, currently occupied by the NEC-Lenovo joint venture.

Details of the talks come from Hidemi Moue, CEO of Japan Industrial Partners, the buyout fund that now controls Vaio, which expects to take the biggest stake in the merged company.

"The PC market is shrinking, which means there are merits in working together to make the most of research, production volumes and marketing channels," Moue said, according to Bloomberg. "We can do it with minimal cannibalization."

It's unclear whether the merger will proceed at a global level, though Moue didn't rule out aiming future products at the global market, given its recently released Windows 10 phone for the Japanese market.

However, according to Bloomberg, the merger talks are focused on dominating the Japanese PC market and shoring up the companies against a shrinking global market for PCs.

Global shipments last year fell by 10 percent to just under 280 million units, according to IDC. The analyst expects shipments to decline by a smaller 3.1 percent in 2016, thanks to commercial deployments tied to Windows 10 upgrades.

All three Japanese brands have seen their marketshare decline in recent years and none figures among the top five PC vendors worldwide, which are Apple, ASUS, Dell, HP, and Lenovo, according to IDC.

As noted by Bloomberg, the merged entity would have about a third of the Japanese PC market, placing it neck and neck with Lenovo-NEC's 29 percent share.

But the merger could mean dark times ahead for staff from Toshiba's and Fujitsu's PC units.

Moue said Japan Industrial Partners has cut Vaio's workforce from about 1,000 to 240 and narrowed its product line to focus on premium business users. He expects the merged company to be able to save on research and development and scale production.

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